The Pakistan Credit Rating Agency Limited
10-Sep-21
Analyst
Muhammad Junaid
muhammad.junaid@pacra.com
+92-42-35869504
www.pacra.com
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Related Research
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PACRA Maintains Stability Rating of NIT Money Market Fund
| Rating Type | Stability Rating | |
|
Current (10-Sep-21 ) |
Previous (10-Mar-21 ) |
|
| Action | Maintain | Maintain |
| Long Term | AAA(f) | AAA(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
NIT Money Market Fund (or the 'Fund') is a low-risk profile fund. The assigned rating of the Fund reflects its good credit quality and its sound liquidity profile, which emanate primarily from its mandate to invest in government securities and other low-duration avenues such as bank placement and ensuring low exposure to interest rate risk. As per the authorized investment policy, the time to maturity of any asset should not be more than 6 months but the weighted average time to maturity of net assets should not be more than 90 days. At end Jun'21, ~96% of the Fund's assets were allocated to banks rated 'AA+' and above. The average duration of the Fund is 4 days, which highlights the superiority of its liquidity profile. The unit holding pattern of the fund is highly concentrated with the top ten investors representing ~74% of the Fund's assets, which exposes the Fund to potentially high redemption pressure.
Going forward, the Fund intends to maintain its asset allocation towards higher-rated banks. Material changes in the fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.
About
the Entity
National Investment Trust Limited was established in 1962 and is a pioneer in the mutual fund industry. The Company’s Board of Directors currently comprises ten board members out of which nine are non-executive. Mr. Adnan Afridi, CEO/MD who joined in Feb'19 holds profound experience in the financial services and capital markets. Mr. Manzoor Ahmed is the COO and has a successful track record of managing the operations and investment portfolio of the Company. The Company is currently one of the largest asset management companies in Pakistan with a portfolio of twelve open-end funds which includes two non-public funds namely NIT-SEF and NIT-EMOF, two voluntary pension schemes, and an exchange-traded fund. The assets under management of the Company stood at ~PKR 99,986mln (including SEF & EMOF) end-Jun'21.